TaxTMI 
TaxTMI 
2019 (6) TMI 1124
X X X X Extracts X X X X
X X X X Extracts X X X X
....) [ITO (TDS)] found that the deductor has not deducted the TDS in some of the payments made in which the TDS is applicable and in some cases, the deductor has made short deduction. When the deductor was asked to explain the reasons for non-deduction/short deduction of tax at source, the deductor submitted Form No.15G/15H of some of the customers and has not offered any explanation in the remaining cases. The AO further observed that the deductor has not deducted the TDS on the basis of Form No.15G/15H. Even though the interest payment was more than the basic limit, the deductor paid the interest without deduction of tax at source obtaining Form 15G/15H. Therefore, the AO proposed to treat the deductor as assessee in default, since, it has failed to deduct the tax at source and remit to the Government account within the stipulated time as prescribed under the Income Tax Act, 1961 (in short 'Act'). Accordingly issued the show cause notice calling for explanation of the assessee intimating the default amount of Rs. 13,96,381/- in 15 cases excluding interest u/s 201(1A) for the F.Y. 2013-14 (A.Y. 2014-15) and Rs. 18,71,389/- for the F.Y.2014-15 (A.Y.2015- 16) in 16 cases. 3. In resp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ATV1584A 5698061 569806 25 142452 712258 2. HINDU COLLEGE DEVELOPMENT AND EDUCATIONAL ACADEMY AAABH0044H 1987960 198796 25 49699 248495 3. SREE KASI VYSYA SATRA SANGAM AAETS3092E 1475095 147510 25 36877 184387 4. MERCHANTS MINI MUTUALLY COOP THRIFT AND CREDIT SOCIETY LTD. AAALM0048A 906446 90645 25 22661 113306 5. KANNA RANGAIAH CHARITABLE TRUST AACTK1262E 668300 66830 25 16708 83538 6. COMMISSIONER OF COLLEGIATE EDUCATION HYD AND SECRETARY AAATT8931D 571976 57198 25 14299 71497 7. KOLLA VENKATESWARLU AGTPK2534N 409896 40990 25 10247 51237 8. SRI VASAVI NITYANNA SATRA VANAPRASTHASRAMA SEVA SAMITHI AABTS6325D 350395 35039 25 8760 43799 9. POLISETTY SOMASUNDARAM CHARITIES AAATP6658D 344974 34497 25 8624 43122 10. KOLLA SIVA NAGENDRAMMA AGTPK2534N 300264 30026 25 7507 37533 11 NARANGI DEVI 292163 29216 25 7304 36520 12 BABITA DEVI 282939 28294 25 7073 35367 13 GUNDA SIVA SURYA KUMARI ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... u/s. 201(1A) of the I.T. Act for the year under consideration. Now, the appellant has come with the explanation that out of these 16 customers, 7 customers being trust, the appellant did not comply with the provisions of u/s. 194A of the I.T. Act as the income of the these trust customers are exempt from tax. This plea of the appellant is not tenable why because, the Bank authorities do not know whether the trust customers can spend 85% of their receipts for the objects of the trust or not. It is premature to come to conclusion beforehand that these trust clients would qualify all the conditions laid down u/s.13 to claim exemption u/s.11 even before they draw their income and expenditure account for F.Y. 2013-14. These trust clients are not connected to appellant bank in any way except keeping their funds with the assessee bank. How the bank authorities would know that the trust client would fulfil all the conditions to claim exemption u/s-.11 of the I.T. Act. Therefore, the plea of the appellant bank that they need not deduct tax u/s. 194A in case of the trust clients is not acceptable. The remaining 7 customers are individuals. The appellant bank has produced form No. 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....beneficiaries(deductees)have filed the return of income: The Ld.AR argued that in such situation raising the demand u/s 201 is not permissible in view of the Hon'ble Apex Court's decision in the case of Hindustan Coca Cola Beverages Pvt. Ltd. Vs. CIT dated 16.08.2007 reported in 293 ITR 226. We agree with the Ld.AR and we remit the matter back to the file of the AO to verify the correctness of the returns filed by all the deductees and restrict the demand to the extent of 201(1A). The assessee is directed to submit the necessary documents before the AO. Accordingly, the appeal of the assessee relating to the deductees who filed the returns of income declaring the income relating to the interest received stands partly allowed for statistical purposes for both the assessment years. The AO is directed to give opportunity to the assessee before concluding the proceedings. 8. The next category of the cases are, the deductees filed Form 15G/15H before the CIT(A). The Ld.AR argued that having collected Form 15G/15H, the deductor is not permitted to collect the TDS, hence, the AO is not justified in treating the assessee as assessee in default and raising the demand u/s 201/201(1A) of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... case of TKD Prasad. 11. For the Financial year 2014-15 the deductor has furnished Form-15G in the case of M.Sambasiva Rao and the AO raised the demand for furnishing Form 15G/15H without PAN or wrong PAN. The assessee has furnished the copy of PAN card in page No.80 of the paper book and the interest payment exceeds the taxable limit. Therefore, the deductee required to obtain no deduction certificate u/s 197 r.w.rule 29 and not Form 15G. Therefore, we hold that the AO has rightly treated the assessee as assessee in default and raised the demand. Accordingly we uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee on this issue. 11.1. Financial year 2014-15 the AO has raised the demand in respect of Vasundhara Devi for not furnishing the PAN number. The assessee has furnished the photo copy of the PAN card in page No.81 of the paper book. Since the assessee has furnished the Form 15G/15H and the amount of interest paid was only Rs. 11,088/-, we hold that the deductee has complied with the rules, accordingly, we direct the AO to delete the demand raised u/s 201/201(1A) in the case of Smt. Vasundhara Devi. 11.2. For the Financial year 2014-15 the AO ha....